HBA-MPM H.B. 2070 76(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 2070 By: Gray Higher Education 7/19/1999 Enrolled BACKGROUND AND PURPOSE The University of Texas Medical Branch (UTMB) at Galveston is the state's oldest and largest health sciences center. Additionally, it is the only one of the state's medical schools that owns and operates hospital facilities. These hospital facilities, which are classified as general categorical (treating all types of illnesses), have served as a statewide "safety net" hospital for patients without medical coverage for more than 100 years. While UTMB's annual operating expenses are approximately $1 billion, the majority of these funds must be earned by UTMB through the provision of health care services. Managed care concepts such as HMOs have significantly altered the environment in which health care organizations operate. UTMB, however, has difficulties effectively operating in this environment due to constraints placed upon it under current law. H.B. 2070 allows UTMB flexibility with respect to entering into contracts with other health care providers, acquiring goods and services, and issuing employee retirement benefits. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the University of Texas Medical Branch at Galveston in SECTION 1 (Section 74.008, Education Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter A, Chapter 74, Education Code, by adding Sections 74.005, 74.006, 74.007, and 74.008, as follows: Sec. 74.005. TREATMENT OF CERTAIN PATIENTS. (a) Authorizes the University of Texas Medical Branch at Galveston (medical branch) to enter into one or more contracts with a county, public hospital, or hospital district to provide treatment to residents of those service areas, including a contract to provide treatment to residents who are eligible for health care assistance under Chapter 61 (Indigent Health Care and Treatment Act), Health and Safety Code. (b) Provides that if a contract is entered into under this section, the liability of a county, public hospital, or hospital district under the contract is required to take into consideration the actual costs of the medical branch in providing health care services under the contract, but prohibits limiting the liability of a county, public hospital, or hospital district from exceeding the medical branch's costs. (c) Provides that if a contract to provide treatment to an eligible resident of a county or service area is not entered into under this section, the medical branch must receive the approval of the appropriate county, public hospital, or hospital district before providing nonemergency care services to the resident. Provides that if that approval is not received, the county, public hospital, or hospital district is not liable to the medical branch for any nonemergency care provided to the resident, and if it is approved, the county, public hospital, or hospital district is liable to the medical branch under Subsection (d) for services provided by the medical branch to the resident. (d) Prohibits the liability of a county, public hospital, or hospital district to the medical branch for the treatment of eligible residents of those service areas by the medical branch from exceeding the responsibility of a county as provided by Chapter 61, Health and Safety Code, unless agreed to by the county, public hospital, or hospital district in a contract to provide treatment to those residents entered into under this section. (e) Assigns the terms "eligible resident," "hospital district," "public hospital," and "service area" the meanings given under Chapter 61, Health and Safety Code. Sec. 74.006. SUFFICIENCY OF FUNDS. Requires the medical branch to take any reasonable administrative or management action necessary to achieve the mission and strategic plan of the medical branch within the total amount of funds received by the branch from all sources, including institutional and local funds and hospital and clinic fees. Sec. 74.007. INCENTIVE RETIREMENT PLANS. Authorizes the medical branch to offer incentive retirement plans to its employees who elect to retire under other state law. Provides that the incentive must be paid from the medical branch's funds or hospital or clinic fees. Prohibits the medical branch from rehiring an employee receiving an incentive under this section without the specific approval of the president. Sec. 74.008. ACQUISITION OF GOODS AND SERVICES. Authorizes the medical branch to acquire goods and services by the method that provides best value, including certain methods of purchase, and requires the medical branch to determine what is the best value to it using certain criteria. Authorizes the state auditor to audit the medical branch's purchases of goods or services. Authorizes the medical branch to adopt rules and procedures for the acquisition of the goods and services. Provides that to the extent of any conflict, this section prevails over any other law relating to the purchase of goods and services except laws relating to contracting with historically underutilized businesses or the procurement of goods and services from disabled persons. Makes this section inapplicable to the purchases of professional services subject to Chapter 2254 (Professional and Consulting Services), Government Code. Provides that Subtitle D (State Purchasing and General Services), Title 10 (General Government), Government Code, does not apply to the purchases of goods and services made under this section, except as provided by this section. SECTION 2. Repealer: Subchapter B (Moody State School for Cerebral Palsied Children), Chapter 74, Education Code. SECTION 3. Effective date for Section 1 of this Act: September 1, 1999. Effective date for Section 2 of this Act: September 1, 2000. Requires the University of Texas Medical Branch at Galveston, the Moody State School for Cerebral Palsied Children, and the University of Texas Medical Branch at Galveston Special School to discuss and enter into a memorandum of understanding no later than January 1, 2000, relating to the transfer of property and other assets of these institutions and relating to the dissolution of the Moody State School for Cerebral Palsied Children and The University of Texas Medical Branch at Galveston Special School. Provides that funding that could have been provided to the Moody State School for Cerebral Palsied Children and the University of Texas Medical Branch at Galveston Special School under Subchapter B, Chapter 74, Education Code, may be provided to the University of Texas Medical Branch at Galveston if the medical branch performs the same duties as the providing institutions before the repeal of Subchapter B, Chapter 74, Education Code. SECTION 4.Emergency clause.